2000/211/EC: Commission Decision of 28 July 1999 on State aid granted by the Federal Republic of Germany to Pittler/Tornos Werkzeugmaschinen GmbH (notified under document number C(1999) 3025) (Text with EEA relevance) (Only the German text is authentic)

• Articles: 4

Article 1

The State aid totalling EUR 15747789,94 (DEM 30,8 million) which Germany has granted to Pittler/Tornos Werkzeugmaschinen GmbH is incompatible with the common market pursuant to Article 87(1) of the EC Treaty.

Article 2

1. Germany shall take the necessary measures to recover the aid referred to in Article 1 from the recipient.

2. Recovery shall be effected in accordance with the rules and procedures of German law. The aid to be recovered shall include interest from the date on which it was at the disposal of the recipient until the date of its recovery. Interest shall be calculated on the basis of the reference rate used for calculating the net grant equivalent of regional aid.

Article 3

Germany shall inform the Commission, within two months of notification of this Decision, of the measures taken to comply with it.

Article 4

This Decision is addressed to the Federal Republic of Germany.

Done at Brussels, 28 July 1999.

For the Commission

Mario MONTI

Member of the Commission

(1) OJ C 361, 24.11.1998, p. 4.

(2) Panorama of EU industry 1997, NACE 29.4.

(3) Panorama of EU industry 1997, NACE 29.4.

(4) These schemes are: the Regulation on the granting of assistance from the Consolidation Fund of the Land Saxony for the restructuring of small and medium-sized industrial firms (Richtlinie über die gewährung von Mitteln aus dem Konsolidierungsfonds des Freistaates Sachsen zur Umstrukturierung kleiner und mittlerer Unternehmen der gewerblichen Wirtschaft) (N 117/95, N 767/95) and the 25th General Plan for the joint/Federal Government/Länder scheme for improving regional economic structures (25. Rahmenplan Gemeinschaftsaufgabe zur Verbesserung der regionalen Wirtschaftsstruktur) (C 37/96 (ex N 186/96)).

(5) Guarantee Regulation of the Land of Saxony (Bürgschaftsrichtlinie des Freistaates Sachsen für die Wirtschaft, freien Berufe und die Land- und die Forstwirtschaft) (N 73/93, together with E 16/94 and C 19/95).

(6) See footnote 4.

(7) These were proposed by the Commission to Germany, which did not raise any objections (letter EB 2 - 702002 - EB 2 715065/2/8 of 23 February 1995, received on 24 February). The criteria are irrelevant to this decision (points 4 and 5 of the conditions).

(8) When the proceedings were initiated, the Commisson expressed reservations about whether the granting of guarantees was consistent with the conditions of the approved scheme (the Guarantee Regulation of the Land of Saxony). The assessment as to whether the granting of guarantees meets the conditions of scheme N 73/93, together with E 16/94, overlaps with the assesment to be made in this decision of the aid on the basis of the guidelines on State aid for rescuing and restructuring firms in difficulty (see Section V.B below), since the conditions of approval are partly the same. Particularly relevant in this context are the criteria that "the plan must restore the firm to competitiveness within a reasonable periods" and "the restructuring plan must be considered capable of putting the company into a position of covering all its costs including depreciation and financial charges" (Guidelines on State aid for rescuing and restructuring firms in difficulty, OJ C 368, 23.12.1994, p. 12, point 3.2.2(i). These criteria are analysed in detail below and were not - as indicated above - met in the case of Pittler/Tornos when the guarantee was granted.

(9) According to point 2.3 of the Community guidelines on State aid for rescuing and restructuring firms in difficulty, the Commission presumes that State aid is involved "where funding is provided or guaranteed by the State to an enterprise that is in financial difficulties". As the Sächsische Landesbank is State-owned, this presumption applies to the unsecured loans totalling DEM 1,8 million.

(10) See footnote 7.

(11) The definitive financial results for 1997 and 1998 were not submitted to the Commission. In view of the firm's insolvency in 1999 and the successive increases in the loan from the Sächsische Landesbank and other aid measures, there are sufficient grounds for assuming that the firm's business situation has not improved in the interim.